BUSINESSES in the North East are optimistic about their future growth prospects – but considerably less so than a they were a year ago.

A new survey found that the average company in the region with a turnover of up to £20m expects to grow its revenue by 56% over the next five years, around 9% per year, according to new research from Santander Corporate Banking.

But they are more cautious about their longer term prospects than they were a year ago when the average five-year growth expectation was 109%.

And the North East is one of the less confident regions in the country. Nationwide the average expectation for five year growth was 88% - rising to 153% in London.

The survey results were more upbeat than the official growth forecasts from the Office for Budget Responsibility’s forecast of 11% GDP growth between now and 2016.

And, despite the fall in optimism against last year’s survey in 2011, one in ten firms across the North East surveyed said their business has never been in better shape.

Craig Iley, regional director for Santander Corporate Banking in the North East, said: “While business owners in the North East remain cautious in the short term, focusing on survival against an uncertain economic background, they are clearly optimistic in their longer term prospects.

“Many people think survival is about holding on to their cash but in order to promote longer term growth, businesses need to invest. Given the low anticipated growth in the UK over the next few years, companies looking to meet their aspirations will need to focus on the fundamentals such as cash flow, customer service and strategic planning.”